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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-KSB
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 25, 1998
IBW Financial Corporation
(Exact name of registrant as specified in its charter)
Maryland 0-28360 52-1943477
(State or other jurisdiction (Commission file number) (IRS Employer
of incorporation) Identification Number)
4812 Georgia Avenue, NW, Washington, DC 20011
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 202-722-2000
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Item 5. Other Events.
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On August 25, 1998, Industrial Bank, National Association, Oxon Hill,
Maryland (the "Bank"), the wholly owned subsidiary of the Company, entered into
a Formal Agreement (the "Agreement") with the Office of the Comptroller of the
Currency (the "OCC"). The Agreement requires the Bank to undertake certain
actions within designated timeframes, and to operate in compliance with the
provisions thereof during its term.
Among the actions required by the Agreement are the following: (i) Within
thirty days, the Bank shall employ an independent management consultant to
perform a study of the Bank's management structure and staffing requirements,
including a report identifying staffing requirements, job descriptions and
evaluations for senior officers, and evaluating organizational structure. The
Board of Directors (the "Board") is required to adopt within thirty days of the
receipt of the report, a plan to eliminate any deficiencies in management,
staffing, or supervision of management; (ii) The Board is required to take steps
to obtain current and satisfactory credit information on loans without such
information, and to insure that proper collateral documentation is maintained.
Management may not grant, renew, alter, restructure or extend a loan without
proper documentation and analysis of credit, purpose and anticipated source of
repayment. In absence of such information, such loans may be made only upon
certification of a majority of the Board why obtaining such information would be
detrimental to the best interests of the Bank; (iii) Within thirty days the
Board shall adopt a written program to eliminate the basis of criticism for
assets rated "doubtful", "substandard" or "other assets especially mentioned;"
(iv) Within thirty days the Board shall establish a loan review system to assure
timely identification and categorization of problem credits and implement a
process to insure the loan review function is independent; (v) Within sixty days
the Board shall review and revise the Bank's loan policy based upon the guidance
on Loan Portfolio Management in the Comptroller's Manual for National Bank
Examiners. Within thirty days thereafter, the Board shall develop a process to
ensure accountability for lending personnel; (vi) The Board shall notify the
Assistant Deputy Comptroller before all loan sales; (vii) Within sixty days, the
Board shall develop a written program to improve and strengthen collection
efforts; (viii) Within ninety days the Board shall develop a profit plan to
improve and sustain the Bank's earnings; (ix) Within 120 days, the Board shall
adopt and implement a strategic plan for the Bank covering at least three years,
including objectives for earnings performance, balance sheet mix, off-balance
sheet activities, liability structure, capital adequacy, reduction in the volume
of nonperforming assets, product line development and market segments intended
to be developed, together with strategies to achieve those objectives; (x) The
Board shall take all steps necessary to correct any violation of law, rule or
regulation cited in any report of examination; (xi) Within thirty days the Bank
shall submit a revised written project plan with respect to Year 2000 compliance
of the Bank's information and environmental systems, including a testing plan
and, within sixty days, a remediation contingency plan in the event any system
is not compliant by the date set forth in the plan.
Compliance with the Agreement is to be monitored by a committee (the
"Committee") of at least three directors, none of whom is an employee of the
Bank or a family member of and employee. The Committee is required to submit
written progress reports on a monthly basis, commencing forty five days after
the date of the Agreement. The Agreement requires the Bank to make periodic
reports and filings with the OCC.
The Agreement does not contain any capital directive or other requirement
that the Bank increase its capital, or maintain a minimum level of capital in
excess of generally applicable capital requirements.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements of Business Acquired. Not applicable.
(b) Pro Forma Financial Information. Not Applicable.
(c) Exhibits. None.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IBW FINANCIAL CORPORATION
By: /s/ B. Doyle Mitchell, Jr.
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B. Doyle Mitchell, Jr., President
Dated: August 26, 1998
